By any accounts, December 9 was a historic day for the people of Townsville.

On that day, Townsville Mayor Councillor Jenny Hill met in Canberra with Queensland Premier Anastacia Palaszczuk and Prime Minister Malcolm Turnbull to ink a 15-year deal which will see all three governments work together to deliver an integrated package of initiatives designed to make the city a more attractive place to live, work, visit and invest.

The deal includes commitments to work with the Port of Townsville to explore ways to capitalise on city’s status as a port city; to establish a new corporation to drive urban renewal as well as a new board to promote industrial related investment; to develop the North Queensland Stadium; to deliver business cases and innovative financing options for an eastern access rail corridor and a new entertainment centre; and to adopt a range of measures to strengthen the defence industry and improve transport, health, education and sustainability.

The Townsville agreement is the first of what the Turnbull government hopes will be a number of city deals around Australia. City deals are multi-party agreements through which federal, state and local governments work with industry and communities within given cities or regions to develop collective plans for economic development and commit to the actions, investments, reform and governance needed to implement these plans.

Apart from the Townsville deal, the Commonwealth has signed memorandums of understanding with the Tasmanian and New South Wales governments to work toward deals for Launceston and Western Sydney.

Not all are excited, however. In an article in The Conversation last April, Griffith University Professor of Urban Management and Planning Paul Burton cautioned that implementation of the concept, which originated from the United Kingdom several years ago as part of an agenda which was designed to transfer powers and responsibility away from the central government and toward local municipalities, would be subject to a number of challenges.

City deals in Australia, Burton said, would be challenging in the light of our three-tiered system of government and the propensity at the turn of the political cycle for incoming governments to tear up deals struck by their predecessors. In the UK, he said, setting up evaluation frameworks which assess the impact of the deals from a social, economic and environmental viewpoint has proven to be problematic.

So how can Australia make good city deals, and what myths and misconceptions exist regarding how they work?

According to Paul Low, head of the Cities Transformation Taskforce, one area of misconception revolves around the idea that the UK model would not work in Australia, where there are three tiers of government rather than two. Whilst it is true that the UK model was introduced as part of a devolution agenda which does not apply in an Australian context, Low said this does not preclude Australia from using city deals in a way which aligns interests at all levels of government and produces a commitment to an agreed set of outcomes.

Australia, he said, has an opportunity to adapt the UK model and to work toward some of its core elements. These include having different levels of government come together and adopt a more strategic focus toward local and regional priorities and creating a better platform by which to channel public sector investment to deliver greater value.

It is also important to appreciate, Low says, that these are long-term agreements which operate beyond three or four-year political cycles. Whilst some priorities will change as governments change, he says the long-term nature of the deals helps to ensure that this happens within an agreed framework of a long-term plan.

In terms of strategies needed to make city deals work, Low – who was part of a task force which led the negotiations on behalf of the Queensland Government with respect to the Townsville deal – says these can be summarised in seven areas. These include:

• having a clear sense at a practical level of the specific context of the particular city or region in question and developing an agreement which reflects these particular challenges and circumstances
• engaging in genuine consultation with local industry and the local community
• ensuring that key stakeholders and decision makers are given adequate opportunity for input
• looking at any public money which is already going into the region and how this could be directed toward the achievement of joint outcomes
• implementing greater discipline about how individual projects are assessed and evaluated
• following through and executing commitments made in order to deliver upon the agreed objectives; and
• adopting measures to monitor progress against objectives.

With regard to the first point, Low says the Townsville deal identified clear themes around the portside nature of the city, its status as an industrial hub for the north, a strong focus upon the defence sector and the notion of an innovative city with knowledge hubs.

In terms of engaging with local stakeholder groups, the Townsville City Council established and ran two key advisory groups which met on multiple occasions. On the last point, the Townsville deal involved seven key indicators by which progress was to be monitored around critical measures such as unemployment and economic contribution.

Low says there are several potential advantages associated with city deals. For one thing, processes by which the deals are made provide a foundation for deeper and more meaningful conversations about where each city and region is headed with regard to the economy at a practical level. In addition, by providing greater certainty and clarity about what will happen with infrastructure and economic strategy, city deals can provide a clearer platform in which conversations about innovative ways in which projects can be financed and funded going forward.

Speaking predominately about the experience from the UK, Dr Peter O’Brien, a research associate at the Centre for Urban and Regional Development Studies at Newcastle University in England, said it was too early as of yet to talk about city deals having had a transformational impact in the UK, although they may well in fact do so going forward.

O’Brien says the concept of city deals has advantages in terms of facilitating greater coordination and a more strategically focused dialogue between different levels of government, as well as fostering greater levels of prioritisation with regard to projects which do in fact go ahead.

Nevertheless, he cautions that lessons can be learned from the UK experience. In some cases, O’Brien says, deals have been negotiated largely in secret with little community input and there has been a lack of clarity as to why some places have got certain agreements and others have arrived at different ones.

In addition, he said, there has been disappointment in other cases where what had been implemented on the ground has in fact turned out to be a substantially weaker response than the deal which had in fact been initially announced.

By contrast, he said a successful example can be seen through the Greater Manchester deal, whereby the 10 local councils involved engaged in sound preparation and developed an understanding about the region’s underlying economic challenges, working toward an agreed strategy which the city deal in fact helped to facilitate.

“That city region knew entirely what their economy was like and what it was likely to be (going forward),” O’Brien said. “They had a strategy and a plan about what they wanted to achieve.

“I think the best deals in the UK have been the ones where the local areas have had a vision and a very clear understanding about the local economy.”

O’Brien is not the only one to raise accountability concerns about some of the agreements within the UK. In November 2015, the UK’s Public Accounts Committee published a report into the first wave of eight city deals signed by the UK government in which it said accountability and responsibility for the success or failure of city deal programs was unclear.

Finally, Low cautions that whilst city deals offer significant benefits, there are challenges in making these work from a stakeholder relationship viewpoint. Whereas the Townsville deal involved a single council, that in Western Sydney will encompass eight and will thus involve negotiations which are more complex, he said.

In this regard, he says the importance of clear objectives and a focus on the most important outcomes cannot be understated.

“There are exciting concepts in all of this but there are real challenges too,” Low said.

“I think everyone has to recognise that it’s a combination of governance and structural reforms. It is going to rely on relationships with individuals at a political level but also within government departments and stakeholder groups to make it work.”